MSE News: Heavy competition sees rents soar

Crabman

Mobeer wrote: »

... and if landlords sell off the houses they previously rented, there would be fewer properties available to rent.

No. Families would be able to buy those houses via a mortgage, instead of their rent payments going into the pockets of a private landlord.

HAMISH_MCTAVISH

Crabman wrote: »

No. Families would be able to buy those houses via a mortgage, instead of their rent payments going into the pockets of a private landlord.

No, because most people can't get mortgages nowadays thanks to mortgage rationing.

That's one of the main reasons why demand for rentals is so high, and the price of rent is soaring.

cashbackproblems

House prices will never unfortunately go down to a level of 3/4x salary due to this massive demand and money coming from family/abroad. Its key for people to get on the ladder rather than wishfully waiting and wasting more in rent, personally if i wasnt in london (where i have no choice but to rent) i would try buying anyway possible

HAMISH_MCTAVISH

Crabman wrote: »

Think you're missing something here.

No, pretty sure I'm not.

Landlords across the UK would be forced to sell off their houses if rent control was imposed.

Why?

And more to the point, what have you been smoking if you think that's actually likely to happen?

This would lower house prices (supply and demand) and open the market to buyers.

Why?

Buyers can't get mortgages, there is no shortage of buyers who could afford mortgage payments. After all, they're already lower than rent in 95% of the UK.

Falling house prices won't make any meaningful change to the number of mortgages issued.

SO the only way the market will be "opened to buyers" is a significant increase in lending.

Mortgages would therefore be easier to obtain.

Why?

House prices are not the reason for mortgages being hard to obtain now.

Crabman

HAMISH_MCTAVISH wrote: »

And more to the point, what have you been smoking if you think that's actually likely to happen?

I am not interested in discussing this with you if you're going to make silly comments.

Other countries have successfully imposed rent control and one has even stopped foreign nationals from owning property which has had the desired impact on reducing house prices for the people who actually live in the country (as opposed to those who buy from abroad for investment purposes and price out the locals).

JeffMinter

Europeans always wonder why the British (and Americans) are so obsessed with owning their own house. After all, most Europeans for generations have rented for life.

But unlike on the mainland, we have no rent price control. Lax rights for renters (those rent for lifers tend to stay in the same house - like social housing here - for life, as long as they pay their way - all the while rent only goes up marginally). Here everything is privatized, there are only basic standards so of course the landlords can get away with a lot. Thus the mentality of having our own house, away from all that fuss.

It wasn't always this way in Britain. I saw a documentary about the 70s, where workers rented at an affordable rate, allowing them to grow their own savings and deposit for their own house... but nowadays that is impossible. If you rent, you cannot save. Meanwhile, rental prices are relatively the same as mortgage repayments. The situation is ridiculous.

JeffMinter

Also another way of forcing the issue is to ban buy to let. Think of all the spare houses, owners will be forced to devalue the costs to sell them thus allowing average earners onto the ladder

HAMISH_MCTAVISH

JeffMinter wrote: »

Also another way of forcing the issue is to ban buy to let. Think of all the spare houses, owners will be forced to devalue the costs to sell them thus allowing average earners onto the ladder

What spare houses?

There is currently a 400,000 house shortage, and at the rate we're building, there will be an additional million house shortage by 2020.

If by some miracle of bizarre social engineering, you managed to ban BTL, you'll only force millions of people to buy houses, at the same time you transfer millions of houses from rented to occupied.

But demand will increase as much as supply..... So prices won't fall.

You can't fix a housing shortage by shuffling millions of people from one category of housing to another.

You can only fix it by building more houses... Which won't happen until lending gets back to normal, as builders won't build what they can't sell.

note_2

'ban BTL'

what, ban people taking out a mortgage to buy a property to let or ban anyone from buying a second home full stop?

will never happen and nor should it for the above reasons.

anyone know what percentage of the housing stock is BTL property?

Mobeer

JeffMinter wrote: »

Also another way of forcing the issue is to ban buy to let. Think of all the spare houses, owners will be forced to devalue the costs to sell them thus allowing average earners onto the ladder

Without buy to let, people with fund to buy a property as an investment will have to buy something else. With fewer buyers there could be lower prices for new homes, but this could just lead to fewer houses being built.

We need a fix for either (or all of) rising population, falling persons per household, and low building. Banning buy to let doesn't solve the problem; we need to look at population.

Consider the case of Australia - some areas are easy to immigrate to, others much harder. We too have some overcrowded areas and some with spare space.